Uruguay - Mixed ranching to intensive crop production

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Summary

Uruguay has a long tradition of extensive sheep and cattle livestock husbandry for subsistence and export as the dominant livelihood strategy. Since the 1970s the system was characterized by two types of livestock production: 1) mixed crop production in rotation with pastures was practiced in the western Litoral and 2) pastoral grazing based on natural grasslands with low external inputs and low-stocking density on poor, erosive soils in the rest of the country. The Uruguayan agricultural system was transformed into a new regime in about 2002, where a new productive system of continuous cultivation of soybeans with other crops emerged. The change was driven by several external forces, starting with an increased demand for animal products, mainly in China. This increased demand for animal feed crops for Asian domestic production contributed to increasing global soybean prices. When farmers showed profitable margins, soybeans became a lucrative option, which in turn drove a huge increase in Uruguayan land prices. This negatively affected economic margins in extensive livestock and intensive soy production became more economically attractive. The abrupt shift from ranching to cropping was catalyzed by a mass infusion of capital and technology from Argentina. Economic crisis in Argentina led actors with capital and knowledge and experience of the new agricultural technology package for no-till soybean production to enter an equally financially distressed Uruguay. The combination of advantageous economic margins, ecologically appropriate technology and necessary capital for this capital intensive production system combined to overwhelm previous Uruguayan resistance (strong cultural identity) to changing farming systems from ranchers to crop farmers in the Litoral region. Within only a few years, large-scale expansion of crop cultivations further affected the livestock sector as the most productive grazing areas were taken for crop production. Since economic margins for crop production were so much higher, the livestock sector lost producers and lands to crop production. Owners who did change farming systems left Litoral or went out of business. Most traditional sharecroppers lost access to land and many became service providers. One of the major ecological consequences of the adopted system is that continuous cropping degrades soil productivity due to decreased soil organic matter and increased risk of erosion. The government has taken steps to mitigate soil degradation by enforcing the existing Soil Law. However, soil degradation has not been stopped only slowed.